Businesses that are accused of or suspected of breaching Irish competition rules will now need to navigate an enhanced enforcement regime under the Competition (Amendment) Act 2022 (the "Act") that comes into operation today. Previously, a major shortcoming faced by the Competition and Consumer Protection Commission ("CCPC") and the Commission for Communications Regulation ("ComReg") was their inability to impose civil fines for breaches of competition law. The Act rectifies this, and strengthens Ireland's enforcement regime relating to anti-competitive agreements and abuses of a dominant position in several other major ways:
Irish Competition Enforcement Regime is Enhanced by New Legislation
Under the Act, competition authorities are now able to impose civil fines for breaches of competition law. This is a significant change because previously Ireland had a purely criminal regime for levying fines arising from convictions for competition law breaches. Civil fines of up to €10 million or 10% of total worldwide turnover (whichever is greater) may now be imposed. Importantly, the Act requires the investigative and adjudicative arms of competition authorities to be separate and independent from each other and requires that civil fines imposed be confirmed by the High Court. Furthermore, those who have had civil fines imposed upon them may bring an appeal.
A new 'leniency' programme allows competition authorities to grant cartel members immunity from, or a reduction in, civil fines. Parties will be eligible if they disclose their participation in a cartel and voluntarily cooperate, independently of the other cartel members, with the investigation. A ‘marker’ system may be applied whereby 'leniency' applicants will be given time to gather the necessary information and evidence required to meet the relevant evidential threshold for leniency, while protecting their place in the 'queue' for leniency for a given period of time.
The new 'leniency' programme complements the CCPC's existing 'Cartel Immunity Programme' which is operated in conjunction with the Director of Public Prosecutions ("DPP") but which offers immunity from criminal prosecution to the first cartel member to admit their involvement in the cartel and to fully co-operate with any subsequent investigation and prosecution.
Furthermore, the Act increases the upper limit of fines that can be imposed in criminal cases for breaches of competition law that are prosecuted by the DPP through the courts. Fines of up to €50 million or 20% of a business's turnover in the previous financial year may now be imposed.
The Act introduces 'bid-rigging' as a specific competition law offence. 'Bid-rigging' occurs when firms bidding in a procurement process agree amongst themselves which of the firms shall submit the most advantageous tender. This allows the extraction of a higher price for the procured goods/services because the 'unsuccessful' bidders in the process either submit inflated bids or do not bid at all. The express provision for bid-rigging as a prohibited activity is intended to clarify that such concerted behaviour during the tender process is unlawful.
Moreover, the Act extends the surveillance powers contained in the Criminal Justice (Surveillance) Act 2009 (as amended) (the “2009 Act”) to CCPC's investigations into anti-competitive agreements. The 2009 Act allows subject to certain safeguards, (amongst other things) the "(a) monitoring, observing, listening to or making a recording of a particular person or group of persons or their movements, activities and communications, or (b) monitoring or making a recording of places or things, by or with the assistance of surveillance devices."
Businesses that are accused of or suspected of breaching Irish competition rules will need to have an appreciation of a much more complex competition enforcement regime now that the Act has come into operation.
In addition to being mindful of the new surveillance powers that are available to Irish competition authorities as well as the new 'leniency' programme, businesses in such circumstances ought to remain alive to the possibility of being subjected to civil or criminal fines. In this regard, it will be crucial for such businesses to remain aware of the various enforcement options that are available to the CCPC and ComReg whenever they are of the view that competition law has been breached.
Helpfully in this regard, both CCPC and ComReg have now published a series of policies, guidelines and procedures on the operation of the new regime. Understanding how the Act and these documents are applied in practice as well as obtaining all relevant insights into evolving enforcement trends will be paramount for such businesses.
The Act also enhances the CCPC's merger control powers. This is the subject of a separate article.
For further information on the Act please contact Eoghan Ó hArgáin, Head of EU, Competition & Procurement in Addleshaw Goddard (Ireland) LLP.